Sherwin-Williams, Valspar Deal Delayed
The Sherwin-Williams Company (Cleveland) and The Valspar Corporation (Minneapolis) announced in a joint news release Tuesday (March 21) that they have extended the termination date of their merger agreement from March 21 to June 21.
The delay was prompted by a timeline shift by Sherwin-Williams, which no longer expects its necessary divestitures to be completed by the end of April as it had been reporting. The extension of the merger agreement to the end of June is intended to provide sufficient time for the divestitures and the completion of the Valspar acquisition.
“We continue to move forward on the divestiture of a single business that we believe will allow us to gain approval from the FTC, and we are in discussions with a number of prospective buyers," said John G. Morikis, chairman, president and chief executive of Sherwin-Williams. "We remain confident in our ability to complete the divestiture at a fair price, and we look forward to unlocking the value of the combined business when the Valspar acquisition closes.”
The deal between the competitors was first announced in March 2016, and approved by Valspar shareholders in June. The companies had hoped the deal would close at the end of the first quarter of the 2017 calendar year.
Morikis most recently said after the company’s fourth-quarter earnings report in January that the divestitures were still on track, and that they were expected to be complete at the end of April.
While that’s no longer the case, Sherwin-Williams is still confident the divestitures will fall below the threshold of $650 million of Valspar 2015 revenues, which is what is needed for the deal to be completed at a price of $113 per share, or $11.3 billion.
John G. Morikis (left), president and CEO of Sherwin-Williams, and Gary E. Hendrickson, chairman and CEO of Valspar.
According to the news release, Sherwin-Williams expects to provide more definitive timing of the divestiture completion and the Valspar acquisition during its first-quarter earnings conference call on April 20.
PPG Still Eying AkzoNobel
Sherwin-Williams and Valspar aren’t the only companies stirring the coating-industry pot.
PPG Industries Inc. (Pittsburgh) is reportedly preparing another takeover bid for AkzoNobel (Amsterdam) after its previous offer of $22.4 billion was rejected earlier this month.
On March 9 AkzoNobel CEO Ton Büchner said that the company was still reviewing its options and that PPG’s unsolicited offer “substantially undervalued the company.”
PPG countered that it would “carefully evaluate and consider its position and path forward.”